Pretoria - Apart from ill health, there is nothing as stressful as financial woes, as many of us have experienced as a result of the Covid-19 pandemic.
Luckily for me, I do not have children whose school fees I have to negotiate with a reduced salary - an expense one can hardly ignore.
So, while licking my financial wounds, I came across the recent judgment delivered in which the dire financial situation of the South African Post Office came under the spotlight.
In fact, this historic institution’s financial state is so bleak that the court ruled it is not obliged to continue making financial contributions during this time to its retirement fund.
The fund turned to court after not receiving members’ contributions for May, June and July.
According to the fund, the benefit of pension contributions was a legal obligation with which the Post Office had to comply.
The Post Office, on the other hand, said while it should have paid these contributions, it simply cannot as the Covid-19 regulations have severely affected its operations and had a devastating effect, thus leaving it completely cash-strapped.
It was said in court that the Post Office’s revenue of R348 million for July was lower than its expenses.
Added to this was unforeseen costs for personal protective equipment and sanitisers, as well as chemical materials to deep clean its various outlets.
This expense would continue into the foreseeable future, it said. In fact, the post office said it had to date spent R36m on Covid-19-related costs.
The Post Office said that as a result of the economic downturn and constraints on its business, it has up to the end of July made a loss of slightly more than R1bn. This, while its staff payments for this year, up to the end of July, ran to R1.2bn, 61% of its total expenses.
It was said the Post Office had done everything it could do to continue to pay salaries, even if it could not afford to cover all fringe benefits, especially medium- to long-term ones such as pension fund contributions. It said that once critical payments were made, there was no money left.
The Post Office went as far as to say once August salaries had been paid, it would need to find cash to pay for September. On the Post Office’s version, it is trading under hopelessly insolvent circumstances.
The retirement fund acknowledged that the Post Office was in crisis, but maintained that no matter what, it was obliged to contribute towards its employees’ pension fund.
But the court came to the aid of the Post Office and said no one could have predicted an economic downturn of this magnitude, caused by the pandemic.
The court said the Post Office could not simply allow its branches to close, and walk away - after all it was the major pay point for South African Social Security Agency grants.
The court concluded that the Post Office could not be compelled to pay the pension contributions at the expense of the collapse of the country’s postal services, to which all South Africans were entitled.
The court said that while it did not seek to undermine the rights of the workers to their pension fund, times were tough at the moment and there were unfortunately priorities.
This judgment was a reality check for me that the economic crunch is real.
One often perceives one’s problems as overshadowing everything, but the reality is that the pandemic has caused grave economic hardship.
And, as the court remarked, it is unknown if and when things will improve.
Pretoria News